Turkey: Accelerating inflation erodes minimum wage increase

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Accelerating inflation in Turkey has pushed the poverty line to four times the minimum wage, according to a report by one of the country’s largest labor organizations, cited by Bloomberg.

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Food inflation rose 7 percent in July from the previous month, raising the poverty line for a family of four to 22,280 pounds ($1,243) a month, the Turk-Is labor confederation said Saturday. This is around four times the monthly minimum wage, which rose by 30% to £5,500 at the start of July.

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The task force defines the poverty line as the total expenditure on items such as food, clothing, housing, transportation, education and health care. Her “hunger threshold” index, which measures monthly spending on food, rose to £6,840, 24% higher than the minimum wage.

Turkey’s central bank kept its benchmark interest rate unchanged at 14% for a seventh month in July. Inflation will jump to 80.1% in July from 78.6% in June, according to the average estimate of 17 analysts surveyed by Bloomberg. The statistics office will publish the figures for this month on August 3.

The central bank expects inflation to close the year at 60.4%, about 12 times above the official target of 5%. The bank sees inflation slowing to 19.2% by the end of 2023 and to 8.8% in 2024.

Source: Capital

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